Is it a good company at a reasonable price? The stock price maybe cheap. This is a small company that does not seem to be able to grow their earnings. It would be a high risk investment, but it might be fun.
I do not own this stock of Wild Brain Ltd (TSX-WILD, OTC-WLDBF). In the CanTech Letter Investors should accumulate DHX Media “aggressively,” says Byron Capital. In the CanTech Letter of May 2014 Byron Capital says investors should accumulate DHX Media aggressively. I also have a report on this stock from Global Maxfin Capital who rates this stock a strong buy in January 2014.
When I was updating my spreadsheet, I noticed that the company lost less than was expected in earnings. EPS loss for 2022 was expected to be $0.09, but came in at $0.01. This company has a financial year ending in June, so I am reviewing the June 2022 financial year. This is a small company and I am surprised at how many analysts are following it and therefore are interested in this company.
The company has been able to grown their revenue, but not earnings. See chart below. EPS is basically depressed by Share-Based compensation and Exchangeable Debentures. See charge covering the last 5 and 10 years below.
| Year | Item | Growth |
|---|---|---|
| 5 | Revenue Growth | 69.80% |
| 5 | EPS Growth | 0.00% |
| 5 | Net Income Growth | 255.20% |
| 5 | Cash Flow Growth | 606.43% |
| 5 | Dividend Growth | 0.00% |
| 5 | Stock Price Growth | -104.94% |
| 10 | Revenue Growth | 598.20% |
| 10 | EPS Growth | 0.00% |
| 10 | Net Income Growth | 85.10% |
| 10 | Cash Flow Growth | 132.22% |
| 10 | Dividend Growth | 0.00% |
| 10 | Stock Price Growth | 371.23% |
The other thing I notice is the debt. They range from not too bad to awful. The Long Term Debt/Market Ratio is 1.00. It is better than it has been, but should be below 1.00. The Intangible and Goodwill/Market Cap Ratio is currently at 1.14. This means that the Intangible and Goodwill items are higher than the market cap and this is not good. The Leverage and Debt/Equity Ratios at 15.35 and 11.38 are awful.
If you had invested in this company in December 2011, for $1,000.10 you would have bought 1370 shares at $2.0.73 per share. In December 2021, after 10 years you would have received $463.06 in dividends. The stock would be worth $4,712.80. Your total return would have been $5,175.86.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $0.73 | $1,000.10 | 1,370 | 10 | $463.06 | $4,712.80 | $5,175.86 |
But, if you had invested in this company in December 2016, for $1,001.10 you would have bought 142 shares at $7.05 per share. In December 2021, after 5 years you would have received $21.87 in dividends. The stock would be worth $488.48. Your total return would have been $510.35.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $7.05 | $1,001.10 | 142 | 5 | $21.87 | $488.48 | $510.35 |
The dividends were suspended in 2019 and I can find no information on if and when they might be restarted.
No Debt Ratios are good and some are bad. The Long Term Debt/Market Cap ratio for 2022 is 1.12 and is currently 1.14. This is too high. Some analysts think it should be 0.50 or lower and others that it should be below 1.00. The Liquidity Ratio for 2022 is 1.33 and this is low. The Debt Ratio for 2022 is 1.35 and this is low. For these ratios I prefer them to be 1.50 or higher. The Leverage and Debt/Equity Ratios for 2022 are 15.35 and 11.38 and these ratios are awful. I prefer them to be below 3.00 and 2.00.
The Total Return per year is shown below for years of 5 to 16 to the end of 2021. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2016 | 5 | 0.00% | -13.14% | -13.37% | 0.00% |
| 2011 | 10 | 0.00% | 19.87% | 16.77% | 2.49% |
| 2006 | 15 | 4.93% | 4.07% | 1.09% | |
| 2001 | 20 | 3.45% | 2.72% | 0.83% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are negative and therefore unusable. The corresponding 10 year ratios are negative and unusable. The corresponding historical ratios are negative and unusable. The current P/E Ratio is 39.86 based on a stock price of $2.79 and EPS estimate for 2023 of $0.07. This is a high ratio. Normally, a ratio of 10.00 or below is a cheap price and probably getting expensive is a ratio of 20.00 or higher.
I get a Graham Price of $0.86. The 10-year low, median, and high median Price/Graham Price Ratios are probably 1.64, 2.65 and 3.76. The problem is lots of the EPS losses. The current P/GP Ratio is 3.25 based on a stock price of $2.79. This is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. Also, the P/GP Ratios high. A high P/GP Ratio is one above 1.50.
I get a 10-year median Price/Book Value per Share Ratio of 2.60. The current P/B Ratio is 5.97 based on a Book Value of $80.91M, Book Value per Share of $0.47 and a stock price of $2.79. The current ratio is 114% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have a Book Value per Share estimate for 2023 of $0.67. This value points to a P/B Ratio of 4.16 based on a stock price of $2.97 and Book Value of $116M. This ratio is 49% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 4.77. The current P/CF Ratio is 6.98 based on a stock price of $2.97 and Cash Flow of $69.2M. The current ratio is 46% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I cannot do any dividend yield testing as dividends have been suspended.
The 10-year median Price/Sales (Revenue) Ratio is 1.89. The current P/S Ratio is 0.89 based on Revenue estimate for 2023 of $541M, Revenue per Share of $3.13 and a stock price of $2.79. The current ratio is 53% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably cheap. The most important test is the P/S Ratio test. Revenue drives both Net Income and Cash Flow, hopefully, anyway. There are problems with the other tests and most ones say stock is expensive.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (2) and Hold (2). The consensus is a Buy. The 12 months consensus stock price is 3.68. This implies a total return of 31.9% based on a current stock price of $2.79. Alpha Spread says Consensus Price Target is $3.88 and Estimated DCF Value is $3.95.
No recent recommendations on Stock Chase. Last ones in 2019 and were Do Not Buy. Stock Chase gives this stock 1 star out of 5. Christopher Liew on Motley Fool reviews this stock and says it is a dark horse that might surprise you in October 2021. Ambrose O'Callaghan on Motley Fool says this company is betting on streaming. The company put out a Press Release on their 2022 annual results. The company put out a Press Release on their first quarter of 2023 results.
Simply Wall Street on Yahoo Finance does a short review of this stock. Simply Wall Street has one warning of interest payments are not well covered by earnings for this company.
WildBrain Ltd is a children's content and brands company, recognized globally for properties such as Peanuts, Strawberry Shortcake, Caillou, Inspector Gadget, and Degrassi franchise. It operates through the following segments: the Content Business, CPLG, which manages copyrights, licensing, and brands for third parties and the Television segment. The company through its subsidiary operates networks of children's channels on YouTube. Its web site is here Wild Brain Ltd.
The last stock I wrote about was about was Stella-Jones Inc (TSX-SJ, OTC-STLJF) ... learn more. The next stock I will write about will be Waterloo Brewing Ltd (TSX-WBR, OTC-BIBLF) ... learn more on Wednesday, November 30, 2022 around 5 pm. Tomorrow on my other blog I will write about Peter Sweden – Substack ... learn more on Tuesday, November 29, 2022 around 5 pm.
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